Regarding the gore factor of Mortal Kombat, I don't see the issue with it being toned down. People don't mind Mortal Kombat being toned down. Just look at the Mortal Kombat movie, which is widely loved by MK & Non-MK fans alike. That movie was PG-13, and had basically 0 gore.
The issue with MK vs. DC was that it was just a bad game, and they tried to include fatalites in a T-rated game when they didn't have to. If you want to look at MK characters being toned down the right way, just look at Injustice. Scorpion, Raiden, and Sub-Zero were heavily toned down, and were still amazing (Plus widely loved by MK fans).
You can still capture the essence of MK by adding some of the games sillier aspects to the game. Like, were talking about toning down the characters... Imagine if Sub-Zero, or Scorpion made it into Smash and one of their taunts was a freindship, a goofy animality like Scorpion turning into a penguin, or even characters landing critical hits that make the toasty guy pop out.
Also, you can't really talk violence when you have characters like Bayonetta & Simon Belmont. Heck, they already censored some of the Castlevania stuff in the game (like the Mask that cries purple goo instead of blood). Plus, in the Castlevania games you fight a boss made from the corpses of dead humans. If that isn't violent, then I don't know what is.